Budget 2019-20 and the way forward for welfare

With the Prime Minister set to announce the federal election date any day now, both major parties have painted a picture of the Australia they want. Treasurer Josh Frydenberg announced Australia was 'back in the black' and 'back on track', with a $7.1 billion surplus for 2019-20, growing over the subsequent two years before falling back in 2022-23.

How does the Coalition — and the Australian Labor Party — plan to spend the fruits of a prosperous economy that is moving back into surplus? Both parties are offering tax cuts, delivered to slightly different segments of the community, as the way to share the country's economic success in the short term. But is that enough?

All Australian families are feeling the heat as cost-of-living pressures increase, but low-income households live in the crucible of low wages growth and an outdated welfare payment system. Research shows that the minimum wage can no longer support a single-income household. And everyone from the trade unions to the big business lobby acknowledges that Newstart is completely inadequate and even a barrier to employment.

Despite that, neither party made any significant move to address the problem. It could be argued that the most forgotten group in last week's budget speeches was the 722,000 people on Newstart.

The Treasurer, under pressure, extended the energy supplement to Newstart recipients after they had initially been left off the list of people getting help to ease ballooning electricity and gas prices. Opposition leader Bill Shorten said Labor would review Newstart if he becomes prime minister. In summary, those on Newstart shouldn't expect much relief — or not any time soon, at least.

That's why a proposal to take decisions around welfare payments out of politicians' hands is the best way forward. If the major parties are going to put supporting the most vulnerable in the 'too hard' basket or kick the can down the road, let an independent commission determine the rates at which various welfare payments can allow people to live a dignified life.

That move would bring welfare payments, including pensions and Newstart, into line with other independent mechanisms, such as the Remuneration Tribunal, which sets the salaries for federal politicians, and the Fair Work Commission, which sets the minimum wage.

"The funding signalled that 'Getting cancer should not be a gateway to financial hardship.' Imagine if that philosophy was applied to the many social issues which impact individuals and families and drive them into financial distress and poverty."

There was one significant paradigm shift announced in the budget speeches: Labor's announcement of additional funding for those with cancer. It has the potential to be a genuine game-changer well beyond the significant number of people for whom cancer is or will become their reality.

What the funding signalled was this: 'Getting cancer should not be a gateway to financial hardship.' Imagine if that philosophy was applied to the many social issues which impact individuals and families and drive them into financial distress and poverty.

Too many Australians find themselves battling financial and other forms of hardship, regularly not of their own making. Just like those facing cancer, people who lose their job unexpectedly, who suffer a debilitating injury or fall into addiction shouldn't have to reach desperation point before they can access support. All too often, such support is difficult to access simply because service providers just don't have access to the level of funding needed.

This budget back-and-forth, falling weeks before an election, is clearly more a political debate than an economic one. It is also a marker of the way the two major parties view the most vulnerable in our society — families battling to pays the bills and those without work who are forced to survive on an inadequate level of Newstart.

Tax cuts over the next four years, offered in fairly equal measure by the two parties, are nice and have the potential to support struggling working families. But the people who need the most support are people who don't have a job, so what good is a tax cut to them?

Addressing cost-of-living pressures is important and tax cuts will help. But it's not enough if you are a single income earner trying to raise your children, or if you are unemployed and forced to live on Newstart.

In the coming weeks, the challenge for every political party is to offer the Australian nation a vision of social and economic inclusion where the inherent dignity and potential of each person can be realised. Maintaining the dignity of individuals and families must be the bedrock of our social and economic policies and of the highest policy priority for every government.

Joe Zabar is deputy CEO and director of economic policy at Catholic Social Services Australia.

Main image: Prime Minister Scott Morrison (right) puts his arm around Treasurer Josh Frydenberg after Question Time in the House of Representatives at Parliament House on 13 February 2019. (Photo by Tracey Nearmy/Getty Images)

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Welfare industry advocates like Joe Zabar and Catholic Social Services Australia need to do more than simply call for more-and-more money for welfare. Already one-third or $175 billion of the Federal Budget is spent on social security and welfare. The primary source of income for around 2.3 million working age Australians between ages 16 and 64 is a welfare payment: 720,000 on Newstart, 685,000 on Disability Support Pension, 280,000 on Youth Allowance, 325,000 on Parenting Payment.
Surely Joe’s task is to not only help those needing welfare, but use his on-the-ground insights make welfare payments but a temporary experience, and reduce the impost on hard-working taxpayers as well? Joe seeks a paradigm shift by Government. What about a paradigm shift for him as well toward more creative programs to make welfare temporary? A job is critical to leaving welfare. What new policies say for Newstart does Joe propose other than just more-and-more money?Barry | 09 April 2019

"But the people who need the most support are those who don't have a job …"
"Maintaining the dignity of individuals and families must be the bedrock of our social and economic policies and of the highest policy priority for every government."
Surely this article applies firstly to the Aboriginal people of this country. Good to see the success of the Cashless Card, accepted by the Aboriginal people who have experienced its effects, and its extension by the current government. Let's hope Labor doesn't axe it to keep certain social justice gurus happy!john frawley | 09 April 2019

Unfortunately getting cancer is already a gateway to financial hardship. My 64 year old husband, like 80% of his fellow applicants has just been rejected for the disability pension. He has cancer and has been undergoing treatment for the past 15 months. The treatment has ongoing, unpleasant side effects. If he applied for Newstart he would need to be looking for work-which in his current situation would be very hard to maintain- the next round of treatment is likely to be radiation therapy- a visit to the hospital every day for seven weeks which would surely put off most prospective employers who would be looking for a reliable worker. Another member of our extended family in his 50’s passed away(cancer) just before Christmas. Sadly, he spent the time from diagnosis to death (about 15months) battling Centrelink. He spent all but two months on Newstart. He struggled trying to meet the conditions of Newstart from his hospital bed. If you have cancer you cannot seem to meet the conditions for Newstart or the disability pension leaving you at the gateway to financial hardship at a time when stress should be minimised. It also leaves people like us very disillusioned. While my husband paid pays tax during his 44 years of full time work he believed he was helping to provide a safety net for ourselves (if needed) and others finding themselves in difficult situations- sadly, it seems that this is untrue. Liliane | 10 April 2019

“Take decisions around welfare payments out of politicians’ hands is the best way forward.” So, democratically elected politicians are replaced by unelected and unaccountable bureaucrats—like the Administrative Appeals Tribunal which frequently thwarts our elected representatives, and the Remuneration Tribunal which rewards them ($912.9 million in 2019)
A job is the best way out of welfare dependency. But Australia is busy embracing a green agenda that will destroy industry and jobs while providing lucrative life-time jobs for a chosen few in the environment industry.
Black reporter, Colion Noir, examining San Francisco’s homeless problem, heard of the “Homeless and Harm Reduction Industry”, an “old boys club”, where hundreds of millions of dollars are spent annually, but no problems are ever solved. It was likened to a money-making operation for non-profit organizations where one can earn $250,000 per annum catering to the welfare-dependent.
Overall, US unemployment rate has hit a 17 year low; Black and Hispanic unemployment are the lowest on record; and the US is now energy independent thanks to oil, coal and gas expansion. No wonder Trump is hated by the privileged establishment.
Ross Howard | 10 April 2019

I would like to see the newstart payments increased to let those on it live with dignity.As all say families with both working are struggling with the cost of living go up so dramatically,its impossible for those on newstart,,Many going without food,medications etc just to afford to pay bills.HAZEL | 11 April 2019

Frightening to read the letter writer glad about 'the Cashless Card and its acceptance byAboriginal people' as if that were the overwhelming truth. I wonder does the writer of the response actually know many Aboriginal people who have accepted such? Refer to the work of Eve Vincent
https://insidestory.org.au/weve-lost-our-vision-a-card-cannot-give-vision-to-the-community/
and her grass roots investigation in the Ceduna area in SA.
Also to the Uniting Communities Paper Tracker in SA - some of the comments in the latter re the humiliation and serious inconveniences experienced by those actually on the Cashless Card make shameful reading. Michele Madigan | 13 April 2019